Reinventing Information Technology in the Digital Enterprise PwC’s New IT Platform:

www.pwc.com/us/newitplatform
Reinventing Information Technology
in the Digital Enterprise
PwC’s New IT Platform:
Achieve High Velocity IT in a Digital World
May 2015
Overview
Business volatility, innovation,
globalization and increased competition
are among the trends forcing business
leaders to step back and look at all
aspects of their businesses. In particular,
the proliferation of cloud, mobile, social,
and analytics technologies demands
ongoing adaptation of business
and operating models as well as
organizational structure as companies
increasingly evolve to digital models.
High on the agenda of the C-suite is
transforming the IT organization to
meet the needs of businesses today.
In our fast-moving world, the winners
will be companies that can sense change
and respond accordingly. But while
the pace of business increases, many
leaders are unhappy with their ability
to execute due to a lack of enterprise
agility. New approaches are needed to
drive flexibility and responsiveness in a
digital world.
Organizations striving to become more
agile need to think in terms of three key
drivers of change:
• The operating environment
that might radically reshape the
business environment;
Operating
environment
Enterprise
agility
Organizational
flexibility
Strategic
responsiveness
IT will move from a centralized authority to an advisor,
broker and orchestrator of business services.
Michael Pearl
Advisory Principal, PwC
• Strategic responsiveness or the
soft levers organizations can pull
in response;
• The organizational flexibility
that affects the capacity to
respond quickly.
Central to greater enterprise agility
is sweeping IT transformation. In
this digital age, IT needs to transition
from a centralized authority into an
orchestrator of business services—one
that empowers all employees with
technology to increase responsiveness
and drive business value. But IT needs
to think well beyond the enterprise
alone, and consider the entire
ecosystem of employees, customers,
partners and suppliers—all with
different processes and systems. IT
increasingly will be chartered with
ensuring seamless and real-time
interconnectivity across the entire
ecosystem in the midst of rapid change.
As the pace of business increases,
IT also needs to optimize for speed,
without compromising on stakeholder
expectations around experience,
quality, security and control. Beyond
technology, traditional organizational
constructs and culture, delivery
methodologies, governance models,
and automation strategies need to
adapt to improve responsiveness.
These are daunting challenges. At the
same time, the gap between business
and IT is growing. Business units,
facing fast-changing demands, often go
around IT to get their own solutions—
leading to an uncoordinated approach
that can increase cost and risk and
create data silos.
Meanwhile, IT’s ability to respond to
just-in-time requests is plagued by
outdated approaches and inflexible
IT architectures that can’t cope with
rapid change. Simply spending more
time and money stoking the legacy IT
furnace won’t work. The days of “big
IT”are gone. Yet, that’s not to say IT
doesn’t matter. Quite the opposite, in
fact.
Successful IT organizations will
be those that carefully evaluate
new technologies to help solve
the organization’s most important
business problems. IT will create and
maintain an “Integration Fabric” that
delivers seamless, secure and flexible
interoperability across a diverse and
distributed ecosystem. IT will also
transform development approaches
to accelerate throughput from idea to
market, while delivering on stakeholder
expectations of service quality, security,
experience and control.
This shift requires change far greater
than technology alone. It requires a
new mindset and a strong focus on
collaboration, innovation and “outsidein” thinking with a customer-centric
point of view.
PwC’s New IT Platform
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Market and Technology Disruption Continues to Challenge Leaders
To reimagine the organizational IT capability, we need to step back and look closely at
the problems we are trying to solve, both from a market and organizational perspective.
Analyzing the technology capabilities needed to tackle the business challenges of today
and tomorrow will help us identify the core capabilities necessary for our new model.
Business, technology and competitive forces are creating the need for a New IT Platform.
These influencing trends…
Economic volatility continues
CEOs are less hopeful than they were a year ago
about global economic growth prospects. According
to PwC’s 2015 Global CEO Survey, 37% think the
outlook will improve over the next 12 months,
compared with 44% last year. 17%—more than
twice as many as last year—think the outlook
will worsen.
CEOs fully embrace digital technologies
CEOs have fully embraced digital technology. Almost
all see it improving operations, but the value goes
deeper. 88% of CEOs globally (84% in the US) say
that digital technologies deliver ‘quite high’ or ‘very
high’ value in operational efficiency gains.
Companies go beyond their industries
to innovate
CEOs are seeing more competitors coming from
industries outside of their own. At the same time,
many CEOs are entering different industries—or at
least making plans to do so. According to PwC’s 2015
Global CEO Survey, 61% of CEOs worldwide think
the increase in the number of their significant direct
and indirect competitors threatens to disrupt their
industries during the next five years.
Data dominates
CEOs are seeing the value in unlocking data
possibilities through digital technologies, but more
needs to be done, especially around decisionmaking., 84% of CEOs globally (89% in the US)
say digital technologies were creating high value
through data and data analytics.
Reset needed for talent and HR
CEOs know they need to increase their
organizations’ ability to learn and innovate. They’re
looking for a broader range of skills and finding
talent in more places.
Require organizations to…
Anticipate which markets offer the best opportunity
for growth. Continue to prepare for organizational
disruptions, such as M&A activity, and the need for
rapid adaptations around processes, organizations,
information and technology.
Develop and understand current and emerging
global marketplace trends based on analyticsbased modeling.
Transform the IT organization to meet the needs of
today’s fast-paced, digital climate. Consider changes
across all aspects of the organization including the
IT mandate; processes; architecture; organization;
and governance.
Cultivate a diversity of talents and a strong sense of
the direction of digital transformation. Be open to
change, new types of thinking, new types of people.
Become comfortable with disruption because if you
really think differently, you can allow some level of
disruption in your organization.
Prioritize technologies for collecting, mining, and
safeguarding data from customers—and the Internet
of Things.
Use tech-savvy talent strategies; foster innovationfriendly cultures; value diversity differently; and
pair Producers (the ideas people) with Performers
(those who convert good ideas to good business).
According to PwC’s 2015 Global CEO Survey, 81%
are looking for a much broader range of skills
when hiring than they did in the past (81% of
CEOs globally).
These dynamics radically change the game. They require a shift from building and
protecting what’s inside the four walls of the enterprise, to an outside-in approach
that thoughtfully blends the best innovations that the market has to offer with the
organization’s core capabilities.
PwC’s New IT Platform
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PwC’s New IT Platform
The New IT Platform encompasses transformation across the organization.
The Mandate
The Process
+
Broker of
Services
The Architecture
+
Assembleto-Order
The Organization
+
Integration
Fabric
The Governance
+
Professional
Services Structure
Empowering
Governance
The Mandate: broker of services
In the past, IT has largely been the
de facto provider of all IT services,
leading to mismatches between
expectation and delivery. In a critical
shift, IT needs to change this posture
and assume the role of broker or
orchestrator of business services and
technology innovation. As use of
third parties increases, IT will shed
more mundane tasks, and assume a
strong internal consulting capability,
evaluating digital technologies and
marketplace innovations through the
lens of business value.
New
Digital
IQ IT The behaviors that accelerate value
=
Savvy organizations will embrace,
from
digital investments
Platform
integrate and support technology
capabilities wherever they reside.
PwC’s 6th Annual Digital IQIn Survey
fact, the term shadow IT will
become obsolete, as IT transitions
PwC’s New IT Platform is a strategic
While moving to the New IT Platform
more responsibilities to power users
point of view that aligns IT’s
requires significant change across all
across the enterprise. At the same
capabilities to the dynamic needs of
aspects of the business, it’s helpful
IT awill
provide guidelines to
the business, and empowers the entire
to
look
at
the
central
areas
requiring
The 5 interdependent digital behaviors thattime,
make
difference
mitigate risks, control costs, and
organization with technology. One
a new mindset and new ways to
standardize data.
thing the New IT Platform is not: an
approach problems.
attempt to simply “fix” pre-existing
IT organizations.
PwC’s New IT Platform spans all
aspects of the organization. The
centerpiece of the new model is
the CIO, who serves as a catalyst
for digital conversations across the
enterprise. When it comes to Digital
IQ, we know that strong relationships
among senior executives are essential
to success. But what was notable
in 2014, according to PwC’s 6th
Annual Digital IQ Survey, is just how
critical the CIO-CMO relationship
has become: 70% of top performing
companies say they have a strong CIOCMO relationship, compared with just
45% for non top performers.
CEO actively
champions
digital
View digital as
an enterprise
capability
+
+
Digital
IQ
Strong
CIO-CMO
relationship
+
_
Significant
New IT Platform
investments
Outside-in approach
to digital innovation
Source: PwC’s 6th Annual Digital IQ Survey
Source: PwC, 6th Annual Digital IQ Survey, 2014
PwC’s New IT Platform
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IT will embrace a fluid, iterative assemble-to-order approach
that emphasizes flexibility, collaboration and innovation.
CSO
CROC
BU
CEO
LEADERS
CFO
development collaborate throughout
the entire service lifecycle, from
ideation through design, development
and support.
ISO
The Digital
Conversation
CMO
CIO
Collaboration between IT and
business units will be critical. Ongoing
digital conversations will be constant,
as IT works to map technology
investments to business objectives
and to solving problems. The new IT
mandate will be one of innovation,
transformation and business value.
The Process:
assemble-to-order and DevOps
Today’s enterprises are becoming
increasingly digitized in how they
engage employees, partners, and
customers. As such, they are leveraging
software platforms to fundamentally
transform their business models.
In this fast-paced, digital world, IT
needs to achieve High Velocity IT
without compromising on stakeholder
expectations around experience,
security, quality, and control.
Today’s organizations are moving
away from the traditional model
where a small group of stakeholders
dictates direction for custom-built
products. Instead, IT will embrace
a fluid, iterative assemble-to-order
approach that emphasizes flexibility,
collaboration and innovation.
Savvy businesses are turning to
an emerging movement—called
DevOps—to achieve High Velocity
IT. Under DevOps, operations and
Ideas will come from cross-functional
communities of employees, customers
and partners, through a structured
innovation and design process
based on social and collaborative
technologies. The emphasis will shift
from pleasing an internal audience to
satisfying the customer.
Traditional organizational constructs
and culture, delivery methodologies,
governance models, and automation
strategies will need to adapt to
improve responsiveness.
The Architecture:
a secure integration fabric
IT is increasingly tasked with securely
integrating “any data from any source
in any format at any time” and making
it easier for any stakeholder, internal
or external, to plug into the enterprise
with reduced dependence on IT. In
light of this, companies need a holistic
and enhanced integration capability,
which is a stark departure from the
integration approach of the past.
A secure integration fabric seamlessly
and securely links all endpoints
(applications, processes, systems,
data and user experiences) across
the entire ecosystem: e.g. connecting
employees and other stakeholders
regardless of their device or location;
orchestrating interactions and
linkages between people, systems,
processes and business rules;
integrating disparate internal and
third-party systems in real-time;
and centralizing data from multiple
sources to provide a comprehensive,
rich repository of enterprise-wide
information for analysis and insight.
While integration in and of itself is
not new to IT organizations, taking
a holistic view across the entire
ecosystem to interconnect people,
process and technology is.
The need for a secure integration
fabric can be seen when looking
at a major consumer products
company that aggressively sourced
its customer and sales applications
to the cloud. This company had
numerous distinct cloud services
handling sales commissions, training,
customer communities and customer
relationship management. A sales
executive sought all of the information
the company had on “Samantha
Jones”, only to learn that there was no
single source. He lost the sale.
Among its benefits, a secure
integration fabric designs a single
customer “view” directly into the
architecture, which is especially
important as enterprises acquire
a greater number of disparate
applications and providers with no
common foundation for centralizing
customer or product data. With a welldefined secure integration architecture
in place, the organization’s ecosystem
can accommodate rapid change and
adeptly handle new and emerging
technologies along with established
ones, while securely integrating
on-premise and cloud-based
services seamlessly.
Under the New IT Platform, organizations will be able to
integrate “any data from any source in any format at any
time.” Any stakeholder, internal or external, will be able to
plug in to the enterprise with reduced dependence on IT.
PwC’s New IT Platform
5
The Organization:
professional services structure
A number of organizational
changes are important within the
New IT Platform. Among the most
important will be the transformation
of IT into more of a professional
services organization. This will
require new digital keystone skills
(see breakout box). Under the new
model, distinctions between IT
and business will blur. As IT begins
to look more like a consulting
organization, required skills will shift
to experienced problem solvers and
enablers of the business. Employees
with multi-disciplinary technology
expertise, deep business domain
knowledge, and an ability to evaluate
the impact of decisions across the
enterprise will be most critical.
Architects will play a leading role.
While new technology skills will be
difficult to maintain in-house, core
marketplace knowledge, business
judgment and prototype design and
management belong inside.
Digital Keystone Skills
• Enterprise and Technology
Architecture
• Project and Program
Management
• Business Requirements
Management
• Quality Assurance
The central control of IT needs to give way to a more free
market oriented form of governance, enabling greater freedom
but within boundaries.
The Governance Model:
empowering governance
As the redistribution of responsibilities
takes place, the governance model
needs to change. We can draw
parallels when looking at socialist
economies “…in which the production
and distribution of goods and services
are administered primarily by the
government rather than by private
enterprise,1” as they transform into
market economies where resources
are “…allocated by the interplay of
supply and demand in free markets,
largely unhampered by government
rationing, price-fixing or other
coercive interference.2”
The central control of IT needs to give
way to a more free market oriented
form of governance, enabling greater
freedom but within boundaries.
Rather than constraining, this move
is liberating, providing necessary
guidance while empowering and
entrusting others to act in their own
interests. What will this look like?
Second, standards, policies and
enforcement will be defined by
a more collaborative approach.
Possibly led by IT, a minimal set of
standards will be jointly identified
by constituents from the broader
enterprise. Pragmatic assessment of
need will dictate what standards are
needed, always with a view towards
empowerment over restriction.
Third, governance will become less
overt and more intrinsic. As more
processes are automated, for example,
business rules and policies will be
‘baked in’ and become less obvious.
For example, the assemble-to-order
process provides a range of allowable
building blocks that can be utilized
in any number of ways; a flag is
raised only if one of the guardrails is
violated (e.g. a non-standard interface
is defined). Ultimately, there will be
certain standards for which decision
rights will continue to rest squarely on
the shoulders of IT. Security would be
among this limited set.
First, a minimal set of critical
standards and guidance will be
published, letting others take control.
For example, data and interface
standards may be published so that
business units can directly engage
with cloud service providers.
• Vendor Management
• Prototyping
• User Experience Design
• Security
1 “Socialism: A Glossary of Political Economy Terms—Dr. Paul M. Johnson,” accessed January 9, 2013,
http://www.auburn.edu/~johnspm/gloss/socialism.
2 Market Economy: A Glossary of Political Economy Terms—Dr. Paul M. Johnson,” accessed January 9, 2013,
http://www.auburn.edu/~johnspm/gloss/market_economy.
PwC’s New IT Platform
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How does this impact your business?
Moving to the New IT Platform
While change itself is not new for
IT organizations, the velocity of
change and associated complexity is
unprecedented and disruptions will
only become greater. Organizations
unable or unwilling to move away
from the traditional IT paradigm
will quickly find themselves at a
competitive disadvantage. Realizing
this vision requires strong executive
sponsorship, leadership and C-suite
collaboration. Leaders will exhibit
common traits as they move to the
New IT Platform (see break-out box).
Those who strategically transform
their IT organizations can seize
new opportunities and become
a customer-driven organization.
Hallmarks include an ability to
constantly innovate, rapidly adapt
to change, lower costs and risk—
and ultimately achieve greater
competitive advantage.
PwC’s New IT Platform key considerations:
• Empower, not control, embracing technology capabilities wherever they are
• Adopt an outside in approach—filtering innovations through the lens of
customer experience and business value
• Engage in ongoing digital conversations to ensure technology investments
map to business needs
• Move to assemble to order enabled by a DevOps approach that is driven first
and foremost by customer feedback
• Integrate the right technologies and innovations at the right time into the
fabric of the organization
• Acquire requisite digital keystone skills and move to a professional
services structure
• Provide parameters to mitigate risk and reduce cost
PwC’s New IT Platform
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For more information contact:
Rohit Antao
Principal
[email protected]
Glen Hobbs
Advisory Director
[email protected]
Curt Jacobsen
Principal
[email protected]
Michael Pearl
Advisory Principal, New IT Platform Leader
[email protected]
Hemant Ramachandra
Principal
[email protected]
Russ Riggen
Principal
[email protected]
Zach Sachen
Principal
[email protected]
Jasjit Singh
Director
[email protected]
For more information, please visit www.pwc.com/us/newitplatform
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